E-Mini Trading On A Simulator Versus Trading With Real Cash: What"s the Difference?
I have met my share of individuals who were e-mini trading superstars on the simulator and couldn't bring themselves to trade successfully with a live trading account.
To be sure, everyone struggles a bit when they are ready to transition from simulator trading to live trading.
I have put a good deal of thought into this problem and years ago realized the issue; consequences.
If you make a bad trade on the simulator you don't have any real problems, except a blow to your self esteem.
With real money, consequences are very real and sometimes painful.
If people have known problems with this issue, what is the answer? My belief is a simple one; most traders spend far too much on time on the simulator hoping to refine their trading skills to near perfection.
Of course, there are no perfect traders and you are going to lose trades; the sooner you learn this fact the better trader you will become.
That being said, many beginning traders feel they can only reach trading nirvana through endless meaningless trades.
I will grant that the first 30 days of trading should be spent intensely learning e-mini trading technique and strategy and implementing that strategy on the simulator.
You will quickly reach a level of competency that you should at least break-even, and the rest of your training should involve trading the YM or NQ live.
I choose these contracts because of the tick value is only $5/tick and I stress trading only one contract.
So, with consequences come emotions; and therein lies the rub.
Improperly timed trades or poor trading technique can result in a losing trade and the unpleasant emotions that accompany failure.
In my view, this is one of the most difficult aspects of e-mini trading.
One losing trade does not constitute a losing trader; but try telling that to a novice trader who has just parted with a couple hundred dollars and is appalled that their simulator training did not provide them with the trading acumen to deal with this very real loss.
To say the least, negative emotions can lead to very unpleasant thoughts and actions.
Traders begin to overtrade or take lower probability trades in order to get back to even and other problems.
I have had members who stay on the simulator for years in an attempt to perfect their trading.
This is a mistake.
I am a believer in trial by fire, and the consequences of poor trading technique are rapidly cleared up because the harsh lesson of losing money is generally not repeated.
In short, simulator trading can lead to bad trading habits and trepidation towards making the jump to a live trading account.
You don't make money pretending to trade, instead learn from your trading mistakes in a live account and perfect your technique.
To be sure, everyone struggles a bit when they are ready to transition from simulator trading to live trading.
I have put a good deal of thought into this problem and years ago realized the issue; consequences.
If you make a bad trade on the simulator you don't have any real problems, except a blow to your self esteem.
With real money, consequences are very real and sometimes painful.
If people have known problems with this issue, what is the answer? My belief is a simple one; most traders spend far too much on time on the simulator hoping to refine their trading skills to near perfection.
Of course, there are no perfect traders and you are going to lose trades; the sooner you learn this fact the better trader you will become.
That being said, many beginning traders feel they can only reach trading nirvana through endless meaningless trades.
I will grant that the first 30 days of trading should be spent intensely learning e-mini trading technique and strategy and implementing that strategy on the simulator.
You will quickly reach a level of competency that you should at least break-even, and the rest of your training should involve trading the YM or NQ live.
I choose these contracts because of the tick value is only $5/tick and I stress trading only one contract.
So, with consequences come emotions; and therein lies the rub.
Improperly timed trades or poor trading technique can result in a losing trade and the unpleasant emotions that accompany failure.
In my view, this is one of the most difficult aspects of e-mini trading.
One losing trade does not constitute a losing trader; but try telling that to a novice trader who has just parted with a couple hundred dollars and is appalled that their simulator training did not provide them with the trading acumen to deal with this very real loss.
To say the least, negative emotions can lead to very unpleasant thoughts and actions.
Traders begin to overtrade or take lower probability trades in order to get back to even and other problems.
I have had members who stay on the simulator for years in an attempt to perfect their trading.
This is a mistake.
I am a believer in trial by fire, and the consequences of poor trading technique are rapidly cleared up because the harsh lesson of losing money is generally not repeated.
In short, simulator trading can lead to bad trading habits and trepidation towards making the jump to a live trading account.
You don't make money pretending to trade, instead learn from your trading mistakes in a live account and perfect your technique.
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